Industry "pigeonholing" in ER

NeedSomeHelp's picture
Rank: Baboon | 129

Hey guys,

I am a senior undergrad with one equity research internship under my belt (last summer). It was at a small asset manager and I was able to do a lot of research, even generate my own initiating coverage reports on a few companies mostly covering REITs and TMT.

Right now, I'm looking at an equity research associate position with a well respected sell-side research shop in an area I really want to live. Basically, my dream job. The only problem is, it's for an analyst that strictly covers REITs. I feel like I have a good understanding of the industry and know I could do the job well, but I felt much more drawn to/engaged by my research, projects, and reports in the technology, media, and telecom sectors.

My question is: if I were to be offered this position, would I essentially be stuck in real estate the rest of my career? How difficult is it to switch coverage sectors later in a career, and does this differ buy-side to sell-side?

Any help would be much appreciated!

Comments (5)

Oct 3, 2018

Can't offer any insight but also interested. I just started FT in FIG research but am interested in many industries

Oct 3, 2018

I think you would have to switch banks to switch sectors. I think switching sectors within the same bank usually doesn't fly, I've never seen it happen. Since you have TMT experience in your back pocket you would at least have a nice reason to switch sectors and a little experience. However, it doesn't sound like you would want to switch from being pigeonholed in one sector to being pigeonholed in another which is what you're essentially doing when switching from group to group on the sell side. If you wanted to go work in a generalist role on the buy side you could probably end up working toward that after a cpl years on the SS.

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Oct 4, 2018

As a person who went from FIG research to consumer VC, I would say switching is possible but only if you do it in 2 years or less. If you want to make a switch, you'll have to basically give up whatever free time you have left to pick up your sector of interest. When I was looking at stuff outside of FIG, I wasn't being questioned on my "pigeonhole" per se as I wasn't in the space that long but I really had to prove out my interest in the VC space.

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Oct 5, 2018

Not impossible to switch sectors but it sort of sets you back. If you were a REIT associate for 2 years and then switch to TMT, you're not really on track as a third year associate in most people's minds. You're kind of year 1 in that sector. As someone just said, if you're gonna switch, do it early.

However, the exception is in related sectors that are often covered by the buyside. For example, if you covered Utilities, you are slightly less set back if you jump to Oil & Gas. Lots of buy side analysts are forced to cover multiple sectors such exploration, oil services, refining, utilities, alternative energy, and midstream.

Hence, if you ever jump to the buy side, it's actually an advantage to have familiarity with two related sectors.....and sometimes these sectors are not even that related like alternative energy and exploration. So do some studying on the sectors related to TMT and the buyside and that might be a good starting point.

Oct 6, 2018